Fident Capital secured $28.0MM of construction financing for an 83-unit podium-style multifamily development in Ontario, California. The borrower, a repeat Fident client with extensive Southern California development experience, closed the 75% LTC loan at a fixed of 10.35% rate with a 30-month term plus two six-month extensions. A Texas-based life company provided the non-recourse financing that exceeded competing offers by $1.5MM.
With $10.0MM of syndicated equity committed and a conceptual $1.0MM cap on additional capital calls, securing the full $28.0MM loan amount was critical to fully capitalizing the deal.
The project employs an innovative density strategy, leveraging California’s state density bonus program and ADU regulations to increase the base unit count from 64 to 83 units. Providing four affordable units allowed density to reach 77 units, while six additional ADUs are planned through the conversion of infrastructure-ready common areas, post C of O.
Market perception posed significant challenges. Most lenders capped proceeds between $22.0MM and $26.5MM, voicing concern on comparable rents and higher terminal cap rates in the Ontario submarket. Fident’s package documented the area’s evolution into a logistics and commercial hub, anchored by the region’s largest cargo airport, the Toyota Arena, substantial retail development, and the Brightline rail to planned for Las Vegas connection. The project’s premium amenities including a pool deck, hot tub, and BBQ areas positions the development to achieve projected rents in a market dominated by older and larger institutional properties.
When the lender’s review of the general contractor’s financials raised concerns mid-closing, the transaction’s structure pivoted from guaranteed maximum price contract to cost-plus arrangement with 30% partial recourse. This structure leveraged the developer’s strong balance sheet while preserving the trusted GC relationship.
The winning lender’s flexibility—focusing on stabilized value without rigid loan-to-cost constraints or prescriptive DSCR tests—proved essential in achieving required proceeds.
